The e-retailer spends at least 50% of its monthly display ad budget on the highly targeted, data-driven—and often cheap—ad placements using programmatic platforms.
The social network places ads on mobile sites and apps.
Facebook Inc. is testing a mobile ad network that would leverage the information consumers share on its platform to place ads on mobile sites and apps, says a spokesman for the social network.
“Our goal is to improve the relevancy of the ads people see,” he says. He declines to share any other details, such as what sites and apps Facebook is placing ads on.
Facebook last year ran a test in which it delivered ads to consumers logged on to the social network on social gaming provider Zynga Inc.’s web site. Those ads showed a user which of his friends had interacted with a brand or game. The social network then began what it called a “small test” last September of a service that places mobile ads in applications outside of Facebook. Those ads, which pointed shoppers to a mobile web site or encouraged them to download an app, used the same targeting as ads on Facebook.
Those efforts off of Facebook generated less than $3 million, the social network reported in a recent U.S. Securities and Exchange Commission filing, and Facebook abandoned its efforts last year.
Facebook’s acknowledgement of its mobile ad network test comes only a few weeks after Twitter bought mobile-focused advertising firm MoPub, which sells a variety of services, including a mobile ad exchange that enables advertisers to bid in real time for ad space in mobile apps.
Facebook is expected to grow its mobile ad revenue by more than fivefold this year, to $2.63 billion from $471.34 million in 2012, according to estimates by research firm eMarketer Inc.
However, that forecast was made before news broke of Facebook’s latest test. And some analysts, like Nate Elliot of Forrester Research Inc., have long maintained that Facebook could develop an ad network to open up a large revenue channel.
Facebook could earn “significant revenue” from using the information it knows about its users to place ads, he says.